Price discrimination, Managerial Economics

Let there be two consumers A and B, each buying at most two units of a good. A values having one unit at £10 and having two units at £12 whereas B values having one unit at £8 and having two units at £16. There is a monopolist providing this good at zero cost but who cannot distinguish among the two consumers.

(a) What is the pro?t maximising uniform price of the good?

(b) Now suppose instead that the monopolist may design packages and charge one price for a single unit and a separate price for a package of two units. What will be the optimal prices?

(c) What kind of price discrimination is this (?rst, second or third degree)?

(d) Describe what the other two types of price discrimination would look like here?

Posted Date: 3/9/2013 5:33:56 AM | Location : United States







Related Discussions:- Price discrimination, Assignment Help, Ask Question on Price discrimination, Get Answer, Expert's Help, Price discrimination Discussions

Write discussion on Price discrimination
Your posts are moderated
Related Questions
What is Demand theory: Demand theory relates to the study of consumer behaviour. It addresses questions like what incites a consumer to buy a particular product, why do consume

Advantages of Perfect Market It achieves, subject to certain conditions, an allocation of resources which is: socially optimal" or "economically efficient" or "pareto effi

Concept of Managerial Economics The discipline of managerial economics deals with characteristics of economics and tools of analysis that are used by business enterprises for dec

Question 1: (a) Briefly explain and distinguish between a centrally planned, laissez-faire and mixed economy. (b) According to you, which kind of economic system is most d

Let consider the following game among an employer (Katharine) and an employee (Kevin). Katharine needs Kevin to work hard rather than loaf around and  that is why she considers spe

Discount Rate (Bank Rate) This is the rate on central bank advances and is also called official discount rate or "minimum lending rate".  When commercial banks find themselves

Theory of Capital and Investment:  Theory of Capital and Investment evinces the below significant issues:  Selection of a viable investment project Efficient allocatio

define scarcity and oppurtunity cost.show how these concepts are useful in managerial decision making

The comparability principle Associations representing workers providing services - clerical, postal, teaching, etc. - have always attempted to  apply the "principle of comparab

Suppose there are two types of T-shirts: branded ones and unbranded ones and people allocate their spending in a way that they buy both types. Suppose the price of branded T-shirts